Avery Dennison has announced preliminary, unaudited results for its second quarter ended June 29, 2019.

In Label and Graphic Materials, reported sales declined 4.1%. On an organic basis, sales grew 0.9%, as prior year pricing actions more than offset a modest decline in volume. On an organic basis, sales in high value categories increased at a mid-single digit rate across the segment. Sales were flat in Label and Packaging Materials and were up low-single digits in the combined Graphics and Reflective Solutions businesses.

Reported operating margin increased 420 basis points to 13.4%, reflecting lower restructuring costs and benefit from productivity actions, including material re-engineering, partially offset by currency-related headwinds and the impact of lower volume. Adjusted operating margin was flat to prior year at 13.8%.

“Our Q2 earnings were in line with our expectations, as we more than offset softer-than-expected organic growth with accelerated productivity actions,” says Mitch Butier, president and CEO. “High value categories continue to grow faster than the base business, which, combined with our relentless focus on productivity, enable margin expansion even in a slower growth environment. Organic growth in Label and Graphic Materials remained soft reflecting lower volume while profitability was strong. Retail Branding and Information Solutions delivered solid organic growth, driven by continued strength in RFID, with significant margin expansion. Likewise, IHM continued to deliver strong margin improvement, despite flat organic growth.

“We are reaffirming the midpoint of our previous guidance for 2019 earnings per share, with organic growth improving modestly over the balance of the year, along with continued margin expansion,” adds Butier. “Once again, our ongoing confidence in our ability to achieve our guidance and long-term targets reflects the resilience of our business and ability of our team to adapt to changing market conditions.”